DirecTV May Be Under Fire And Outmatched

Worried about AT&T’s DirecTV and all the iffy news circulating around the pay TV service? Perhaps AT&T needs a good marketing story about television.

Earlier this week, a group of AT&T investors filed a lawsuit against the company, charging it has been fraudulently altering its subscriber count at DirecTV.

On Wednesday, a report in The Wall Street Journal suggested AT&T is looking for a “divorce” from DirecTV.  That's on the heels of a different “activist” AT&T investor calling into question AT&T's recent acquisition of Time Warner, as well as its 4-year-old DirecTV purchase.

The latter mulled the idea of a possible spinoff or a merger with its longtime competitor, Dish Network. That's something that has been considered for years, especially when traditional pay TV subscriber declines started to occur.



The group of investors’ lawsuit didn’t go into subscriber number specifics about the losses of DirecTV's satellite service or its virtual pay TV platform, DirecTV Now. It did talk about alleged fake accounts, unrealistic sales goals and other fraudulent price/subscriber issues.

All this comes as estimates note for the first nine months of this year, AT&T could see a massive 2.5 million subscribers loss at DirecTV, DirecTV Now, and U-verse. Is there a suggestion that without alleged manipulation, things would be on a steeper sinking track?

The truth is AT&T bought DirecTV in 2015, at exactly the wrong time. Overall cord-cutting was already starting in 2013 by some estimates. This even factors in the move of DirecTV starting the internet-based DirecTV Now (now AT&T Now) in late 2016.

If you are not confused enough, consider this:

AT&T recently floated another idea — a new internet-branded video service, AT&T TV. In July, the company said AT&T TV would be starting a test in a few markets -- a live TV service over broadband. The company describes AT&T TV as a “thin client broadband TV service.” (Does that mean a low consumer price?)

The company describes AT&T TV on its website this way: “One device. One remote. Just turn it on to watch live TV and on-demand titles. Then seamlessly jump to your favorite apps. And with a universal search, you can find what you want even faster.”

Does that mean another service, carrying live, linear TV networks, both broadcast and cable, or something else?

Analysts may be scratching their heads. Does the company need another premium video platform when they already have three: DirecTV (satellite), DirecTV Now (Internet-based) and U-Verse (fiber-based TV service)?

Media/communications mergers and startups can come fast. The better companies go through rough and tumble periods of melding new businesses into their corporate structure. That’s predictable. Analysts don’t mind that.

But what they really want to know: Is there a clear consumer market vision -- something more than television as we know it? Until then, we’ll continue to change channels.

1 comment about "DirecTV May Be Under Fire And Outmatched".
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  1. Patricia O'Connor from Non Profit, September 23, 2019 at 3:04 p.m.

    I moved my mom into assisted living in December 2017 because she suffers from dementia.  We just discovered that her basic DirecTV is included in her rent.  I have been paying near $50 per month for her television service.  When I called to ask why she was being charged, they said they do not have information except that the upgrade to "premium" was made by phone.  My mother couldn't possibly know the telephone number to call and so I have to assume they called her.  She does not watch any of the premium channels and we have spent nearly $1,000 that she can ill afford.  It is near impossible to find someone who will address this issue.

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